NYSE:ZTO is an undervalued gem with solid fundamentals.

Last update: Dec 14, 2023

Our stock screener has singled out ZTO EXPRESS CAYMAN INC-ADR (NYSE:ZTO) as a stellar value proposition. NYSE:ZTO not only scores well in profitability, solvency, and liquidity but also maintains a very reasonable price point. We'll explore this further.

Valuation Assessment of NYSE:ZTO

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:ZTO boasts a 7 out of 10:

75.00% of the companies in the same industry are more expensive than ZTO, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 25.40. ZTO is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 10.99, the valuation of ZTO can be described as reasonable.
Based on the Price/Forward Earnings ratio, ZTO is valued cheaply inside the industry as 93.75% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of ZTO to the average of the S&P500 Index (20.94), we can say ZTO is valued slightly cheaper.
Based on the Enterprise Value to EBITDA ratio, ZTO is valued a bit cheaper than the industry average as 68.75% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, ZTO is valued a bit cheaper than the industry average as 62.50% of the companies are valued more expensively.
ZTO's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of ZTO may justify a higher PE ratio.
ZTO's earnings are expected to grow with 21.28% in the coming years. This may justify a more expensive valuation.

Profitability Insights: NYSE:ZTO

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:ZTO was assigned a score of 7 for profitability:

ZTO has a Return On Assets of 10.13%. This is amongst the best in the industry. ZTO outperforms 87.50% of its industry peers.
With a decent Return On Equity value of 14.86%, ZTO is doing good in the industry, outperforming 68.75% of the companies in the same industry.
ZTO has a better Return On Invested Capital (10.84%) than 75.00% of its industry peers.
The 3 year average ROIC (8.39%) for ZTO is below the current ROIC(10.84%), indicating increased profibility in the last year.
ZTO's Profit Margin of 22.13% is amongst the best of the industry. ZTO outperforms 100.00% of its industry peers.
ZTO has a better Operating Margin (25.21%) than 100.00% of its industry peers.
ZTO has a better Gross Margin (29.42%) than 62.50% of its industry peers.

Assessing Health for NYSE:ZTO

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:ZTO scores a 6 out of 10:

ZTO has an Altman-Z score of 4.21. This indicates that ZTO is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.21, ZTO is doing good in the industry, outperforming 68.75% of the companies in the same industry.
The Debt to FCF ratio of ZTO is 1.61, which is an excellent value as it means it would take ZTO, only 1.61 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.61, ZTO is in the better half of the industry, outperforming 68.75% of the companies in the same industry.
A Debt/Equity ratio of 0.25 indicates that ZTO is not too dependend on debt financing.
The Debt to Equity ratio of ZTO (0.25) is better than 62.50% of its industry peers.
The Quick ratio of ZTO (1.31) is better than 62.50% of its industry peers.

Understanding NYSE:ZTO's Growth Score

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NYSE:ZTO boasts a 6 out of 10:

ZTO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.39%, which is quite impressive.
The Earnings Per Share has been growing by 13.52% on average over the past years. This is quite good.
The Revenue has grown by 13.18% in the past year. This is quite good.
ZTO shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 22.05% yearly.
Based on estimates for the next years, ZTO will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.28% on average per year.

More Decent Value stocks can be found in our Decent Value screener.

Check the latest full fundamental report of ZTO for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.